Technology services company Globant has acquired Bluecap, a Spain-based consultancy firm that leverages advanced analytics to develop new business models for financial institutions. Globant shares rose 2.7% on Dec. 18 in reaction to the news.
Globant (GLOB) stated that Bluecap will maintain its name and image as the strategy consulting brand of the company. Bluecap has over 160 consultants working for reputed financial institutions, such as Santander, Caixabank and Sabadell. The Bluecap acquisition is expected to expand Globant’s presence in Europe and deepen its capabilities for the financial and investment sector. The company did not disclose the financial terms of the transaction.
Maite Barrera, Bluecap’s CEO stated, “At Bluecap, we design new business models and strategies for tomorrow’s banks, drawing on our advanced analytical skills while helping to integrate new services offered by the most innovative fintech firms. By joining forces with Globant, we will be able to offer even better value to our clients, combining our commercial banking and risk management capabilities, with Globant’s digital transformation expertise and their global presence.”
Meanwhile, Martín Umaran, Globant’s co-founder and Chief of Staff for M&A, stated that with the Bluecap acquisition, the company is moving forward with closing strategic investments in areas that complement Globant’s value proposition. (See GLOB stock analysis on TipRanks)
On Dec. 4, Jefferies analyst Surinder Thind initiated coverage of Globant with a Hold rating and a price target of $200. Thind argues that while the stock is “worth holding onto” for existing shareholders given highly favorable secular trends and strong execution, he suggests patience for potential new investors based on how the stock has significantly outperformed peers year-to-date on record multiple expansion.
Thind believes that the current multiple suggests the company is being viewed as more of a high-growth software play than as an IT consulting firm, which “warrants caution.”
Like Thind, the Street is also on the sidelines, with a Hold analyst consensus based on 1 Buy, 1 Hold and 1 Sell. With shares rising 101.2% year-to-date, the average price target of $166.33 indicates a possible downside of 22% over the coming months.
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